A method for palette coding is disclosed. In an encoder side, the method determines whether a first block is coded using a palette coding mode or a non-palette coding. If the first block is coded using the non-palette coding mode, a first color table for the first block is derived based on one or more color tables associated with one or more previously processed blocks. If the first block is coded using the palette coding mode, the first color table is derived from the first block. A second block coded after the first block may use the first color table as a palette prediction. At the decoder side, if the current block is coded using the palette coding mode, a first color table based on a previous coded block is derived and the current block is decoded using a first color table as a palette predictor.